The Gotham Goliath Adds a Smart Beta Bond ETF
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Monday, October 18, 2021

The Gotham Goliath Adds a Smart Beta Bond ETF

An ETF industry titan recently rolled out a smart beta bond fund.

Andrew Ang
Head of Factor Investing Strategies
Last Thursday, Karen Schenone, head of U.S. fixed income strategy at iShares, and Andrew Ang, head of factor investing strategies at BlackRock [profile] (iShares' parent), unveiled the new iShares USD Bond Factor ETF. The fund debuted on October 12 and uses the USBF ticker on the Nasdaq.

BlackRock Fund Advisors serves as the new fund's investment advisor. James Mauro and Scott Radell PM the fund, which tracks the BlackRock USD Bond Factor Index. The fund's expense ratio is 18 basis points.

Schenone puts the launch in the context of "historically low yields" and notes that the index that the new fund tracks "systematically looks at all types of bonds."

"USBF's investment strategy harvests the value factor to identify underpriced securities, while using the quality factor to uncover the investment grade and high-yield corporate bonds that exhibit lower probabilities of default," Ang states.

Other service providers on the new fund included: BlackRock Index Services, LLC as index provider; BlackRock Institutional Trust Company, N.A. (BTC) as securities lending agent; BlackRock Investments, LLC as distributor; PricewaterhouseCoopers LLP as independent accounting firm; State Street Bank and Trust Company as administrator, custodian, and transfer agent; and Willkie Farr & Gallagher LLP as counsel.

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